India signals deeper tariff cuts to boost US trade ties

India has expressed willingness to implement deeper tariff cuts, including zero-duty provisions on select agricultural products, in an effort to boost bilateral trade with the United States to $500 billion by 2030.

This ambitious target was set during Prime Minister Narendra Modi’s recent summit with former US President Donald Trump, according to officials and trade experts familiar with the matter, Caliber.Az reports via Indian media.

To avert a potential trade war, Indian negotiators have signaled comprehensive tariff reductions across multiple sectors, including automobiles, chemicals, electronics, pharmaceuticals, and medical devices. An official with knowledge of the discussions confirmed on March 9 that the move aims to facilitate a broad-based trade agreement between the two nations.

A high-level Indian delegation, led by Commerce Minister Piyush Goyal, is currently in Washington to address concerns about India’s tariff structure. The team is working to dispel the perception that India imposes excessively high tariffs by presenting data on recent reductions. These include a cut in tariffs on high-end motorcycles from 110% to 100% and on American bourbon whiskey from 50% to 30%.

India has also proposed a zero-duty framework for specific quantities of lentils and peas imported from the US. 

Additionally, Indian officials have pointed out that the country levies an average tariff of just 3% on over two dozen US export categories, with high tariffs applying only to a limited number of products.

Speaking on the US economy on March 7, Trump acknowledged India’s commitment to lowering tariffs. “They’ve agreed, by the way, they want to cut their tariffs way down now,” he said in Washington.

Trade analysts warn that India remains vulnerable to potential tariff hikes by the US, given its $41 billion trade surplus with Washington. A note from the State Bank of India suggests that a 15%-20% increase in US tariffs could lead to a 3%-3.5% decline in India’s overall exports.

By Khagan Isayev